October 20, 2011

Flat tax and pulling your own weight

by Doctor Science

Herman Cain has lured all the flat-tax advocates out into the open again, and I'm trying to find a more effective way to reply to them than banging my head against the wall and chanting "regressive! regressive!"

In fact, why should taxes be based on income at all, if the services offered by government are not received based on income.
...
Largely, our taxes should be paid relatively equal amongst everyone, if we're so sure government should be doing what it's doing now.

Paul, if economics is not a morality play, explain to me why the objectives of your economic solutions are always to help the parasites of society while pretending that we're somehow MISTREATING them if we choose not to hold a gun to the rest of society's head to collect taxes.

The top 1% could pay far less % in taxes for all I care, as long as they're not withdrawing services directly from government, and not infringing on my freedoms.

Here's the metaphor I'm working on to try to explain how wrong this is.

Imagine a group of five people. They're in a room on the third floor of a building with no elevator, and they have 1000 pounds of assorted stuff to bring downstairs and stack outside the building. What's the fair way to do this?

The simplest solution, but only works in highly-specialized cases. Part of Defenestration, an ongoing installation by Brian Goggin at the corner of 6th and Howard St. in San Francisco. Photo by KayVee.Inc.

1. Everyone could bring down their own stuff. If the stuff is such that it's really easy to tell what belongs to whom, then maybe that would be the fair thing to do. This doesn't correspond to taxation at all, but to purchasing. No-one's life is easier, there are no burdens shared or economies of scale, but it's easy and fair.

2. Now suppose the group is a band: 2 guitarists, bassist, drummer with a full kit, and the guy who plays the harmonica.

Ron Woods' painting of the Stones performing in 1975, by which point they definitely didn't have to carry their own equipment.

Clearly the equipment burden is distributed very unevenly, and they'll never get to the gig on time if everyone is only responsible for their own instrument. So they decide that each person takes down about 200lbs of stuff, to distribute the work more evenly than the burden. This is the flat tax: one-fifth of the population (by wealth) takes down one-fifth of the stuff, the taxes. It looks fair: the burden is equally shared, everyone pulls their own weight.

3. But now, suppose the five people are a family:

grandma, age 75

dad, age 45

mom, age 45

son, age 20

daughter, age 10

and they're taking the stuff downstairs to load into the van and go on a trip together.

[I couldn't find a good picture to illustrate this scenario -- suggestions wanted!]

The 20-year-old son is probably *much* stronger than anyone else. Grandma may have trouble getting down with much more than herself, and while the 10-y.o. is pretty bouncy, she can't really take all that much in any one trip. The parents fall in between.

Is it fair if the son ends up bringing down 600lbs of the stuff, while Grandma brings only 30lbs and the others divide up the rest? Yet I assume we'd all agree that this would be the *reasonable* thing to do, even though it means everyone doesn't "pull their own weight".

In this metaphor, the strong healthy young son represents the wealthy, the people with the most money=strength. This is *progressive taxation*: we're all on this trip together, so we help each other out.

The fact is, speaking as someone who's been poor and who's been well-off, when you're poor each dollar and each percent of income going to taxes *hurts more*. For both poor and wealthy to pay 20%, say, in taxes is *not the same thing*, because it's not the proportion of your income that makes the difference, it's how much it changes the kind of life you can live. When I was making only $10K/year (30 years ago), $1,000 was a monstrous expense, more than I could bear to think about. When we had an income of $80K, $8K was a *lot*, but not more than we could afford for something like a new roof. It had to be budgeted, but it wasn't a catastrophe. I'm not sure what we're going to take in this year, but 10% would make me sweat -- yet not *panic*, as it did when I was truly poor.

Maybe that should be the metric: If you merely *resent* your taxes, you're not paying too much. It's only when they make you at least break a sweat that you might deserve some relief.

A flat tax is like crushing Grandma and little sister under a burden you could bear, because "it's fair!" and "everyone should carry their own weight".

Comments

Ugh, you have to understand that Obama is, by definition, responsible for anything bad that is done, or anything good that is not done. Therefore the failure of the Senate to ratify those treaties must be laid at his door by any right-thinking person.* Q.E.D.

russell: In my opinion, the primary goal of tax policy should be to raise whatever revenue we need to run things.

I recognize that political considerations come into play, but the starting point, at least, ought to be that the point of taxes is revenue generation, rather than economic engineering.

I wholeheartedly agree here. But it seems to me that the "political considerations" point has trumped all for about, say, the last 35 years. Thus, things that cannot be accomplished directly through actual cash expenditures are done indirectly through deductions and credits in the tax code. Why? Because we are the U!S!A! and don't have a central industrial policy, except that we do.

To the extent we manage to actually do things directly via expenditures, loans, and/or loan guarantees, any misstep blows up in the Administration's face (see, e.g., Solyndra, which now threatens to take down any kind of subsidy/targeted deduction/credit to the clean energy industry, despite that fossil fuels are supported up the wazoo ("up the wazoo" being a technical term)).

So, since we're "champions of the free market," any tinkering therewith to favor one industry over another, must generally be done through the tax code (unless it's defense) because it (a) disguises it's true cost; (b) can't be pinned particularly on either party (the GOP loves it because it's a "tax cut," Dems are in favor because it's close to spending $$ on the same cause); and (c) is hard to quantify any "waste."

Shorter Ugh: since the tax code is the only way to conduct industrial policy in the U.S. at least in the short-medium term, that's what we do.

Hairshirt: "What would you say if I said that taxes are really a way to...."

I'd say that you are dead on. I'd also go on to state that taxes essentially create demand for the currency in a fiat currency system.

And Russell above, I deeply regret to say that I disagree with you. Taxes are indeed social engineering. It's all part and partial about how we decide to cut up the economic pie. In the final analysis, the size of the pie is dictated by available resources (land, labor, capital, etc.), but the size of the various slices (in aggregate) are political decisions.

Tax policies should be part of overall fiscal policy...i.e., managing aggregate demand. Who pays which taxes is the gritty politics of the thing....the distribution of our economic output. That is indeed social engineering.

that doesn't imply that either dentists or plumbers are entitled to a steeply progressive share of everybody's income.

They appear to hold a different opinion.

Taxes are indeed social engineering. It's all part and partial about how we decide to cut up the economic pie. In the final analysis, the size of the pie is dictated by available resources (land, labor, capital, etc.), but the size of the various slices (in aggregate) are political decisions.

Tax policies should be part of overall fiscal policy...i.e., managing aggregate demand. Who pays which taxes is the gritty politics of the thing....the distribution of our economic output. That is indeed social engineering.

I guess I disagree with some key parts of this.

I see what you (and Ugh) are saying about taxes as a lever of fiscal policy, and I see the value of that. The government is a huge actor in the economy, and it's hugely sensible for the government to balance it's mix of raising revenue vs spending to help keep the economy on a stable footing.

Because (a) it can, and (b) it has to do those things anyway.

But the main purpose of taxation is not tweaking the economy, it's raising revenue for government operations. Or, should be, IMVHO.

It's the difference between doing a necessary thing in the most beneficial way, and doing it purely for the secondary benefit.

If that makes sense.

I think that the division of the overall pie being a political decision is not such a great idea. How the pie gets divided should really be a primarily private decision.

Or, the result of millions of private decisions.

IMVHO, of course.

What properly belongs to the public sphere, again IMVHO, are the rules by which the division occurs.

So, not engineering specific outcomes, but preventing gaming and manipulation, and insuring that all interests are considered and respected.

All IMVHO.

Shorter Ugh: since the tax code is the only way to conduct industrial policy in the U.S. at least in the short-medium term, that's what we do.

But the main purpose of taxation is not tweaking the economy, it's raising revenue for government operations.

In a fiat money system, the government does not HAVE TO tax in order to spend. Think of taxes as a tool...if that helps.

As you said, any type of tax gores somebody's ox. The Antebellum South was up in arms over tarrifs, the main funding mechanism for the federal treasury at that time. The rich hate income and inheritane taxes for obvious reasons.....taxing liquior really pisses me off and cuts into my drinking.

It could be fair to say that taxes are not necessarily adopted to have consciously chosen social engineering consequences (sin taxes, which see), but they all have social engineering consequences due to their distributional effects.

Let's see, where to start? I guess with the fact that you know precious little about me, and so can not confidently make such a statement unless you're defining your terms so as to make the conclusion somewhat tautological.

And, of course, looking over your rant, I see you did exactly that. "Once one realizes that everyone is using more GPIS than they're paying for". Yup, you constructed a tautology, by defining paying your share in a bizarrely irrational way designed to render your position unassailable.

Guess I'll leave it at that, as you were doubtless aware of what you were doing when you penned that screed, and couldn't really expect a serious response.

@russell So, not engineering specific outcomes, but preventing gaming and manipulation, and insuring that all interests are considered and respected.

Which would seem to be a very strong argument for massively simplifying the tax system. I am willing, I admit it, to throw a huge number of tax preparers and tax attorneys out of work. I thing even with the loss of those jobs, the net benefit to the economy would be worth it.

And, of course, looking over your rant, I see you did exactly that. "Once one realizes that everyone is using more GPIS than they're paying for". Yup, you constructed a tautology, by defining paying your share in a bizarrely irrational way designed to render your position unassailable.

Actually, Brent, GPIS might be viewed like fax machines. Having one fax machine is basically meaningless, because you can't fax anyone and no one can fax you. Having a limited number of fax machines is of limited utility, but when you have a relatively large number of people owning faxes, the network adds a particular value that is fundamentally _not_ paid for.

Unfortunately, by viewing the network as simply the sum of what people paid into it completely misses the value that is added when the network is large and extensive. Like GPIS, and I suspect that Ugh chose that acronym because so many folks want to simply piss it all away...

bobbyp, on that criteria, any and every change to the law, of any kind, constitutes social engineering. Which may be true in some senses, but makes the term a bit useless for discussion of any particular change. ;-)

"Shorter Ugh: since the tax code is the only way to conduct industrial policy in the U.S. at least in the short-medium term, that's what we do."

I don't like this, at all.

Seriously. If you can't get industrial policy through the legislature when people are looking, the fact that you can sneak it in the tax code is a BAD THING, not a good thing.

I feel the same way about the idea that constitutional amendments are so hard that we *have to* make the changes through judges.

It doesn't sit well with me that things you can't do in the open can be rammed down the polity's throats through the back channels. And even if that is realistically a description of what is happening now, I don't have to support it and I don't have to like it.

They are not even pretneding anymore. Eric Cantor's aide told a reporter that his speech on income inequality would “"...will zero in on how Washington could […] make sure the people at the top stay there".

There is quite a bit of overlap bertween the people who passed voter supression laws, attacked the economic security of government employees, are anti-union general,oppose increasing the minimum wage, opposed Mit Romneys' health reform plan after Obama supported it, are responsible for most of the national budget deficet, dishoestly claim that ta cuts for the wealthy creates jobs, and are now spreading the lie that 47% of the population pays no taxes. Those are the same people who wanted to gut the funding for Medicaid and unemployment while extending tax cuts for themsleves yet again. The same people who turned down a .05% tax increase on the wealthiest to pay for teachers and first responders.

A subset of those assholes are supporters of a flat tax. I'm speakig of Republicans in COngress, of course, and many stgate leglislatures.

But the same correspondence shows up right here. There is an awful lot of overlap between the people who rationalize a flat tax and the people who rationalized the actions of Republican politicians at the national level or the state level in places like Wisconsin,Florida, Ohio and Tennesee.

It is all about makikg sur that those on top stay there.Andit si also about making sure that those who are not on top get pushed down farther. It's the old Medieval idea of the Grfeat Chain of Being mutated inot madern language. The assumption is that if you have that narrow set of skills that make you a winner inthe competion, then you get to keep your resources for yourself and get everythig you need or want by buying it. On the other had if you do't have those skills then it is your own fault and even if you work hard you cannot expect to get a minimally decent life. No support in your old age, no health care now, no oability to join with other people to get higher wages, a big hassle trying to vote because unworthy need to be kept away from the polls....and out of your insufficent wage you will pay sales tax, local taxes, income taxes and fees for services that used to be paid for out of federal dollars but aren't anyhmore because it is so importat to serve the rich and pay off the Republican deficet.

but they all have social engineering consequences due to their distributional effects.

Social engineering is not the consequence but the purpose for taxation.
To see how, why not investigate how taxation started and for what purpose, but also need to know purpose of government and how it started.
Cleek explained previously how government in Somalia can start to organize. Primary purpose of a government is to keep order and stability, secondary is to solve the next biggest problem for society that is out of capability of individuals.
Before 1913 there was not much taxation, government revenue came from tariffs and land royalties. Revolution in information speed and philosophical thought moved public opinion and forced government to stabilize the banking system that was causing repeated booms and busts. Higher revenue was raised trough higher land rent taxes.
It was the fear from worldwide communist rise that will arrive in the US during Great Depression that forced FDR to calm population by equalizing wealth inequality trough income taxation.
Moderating the wealth distribution trough progressive taxation was done to keep order and stability as a primary purpose of a government. You all are aware of many instances of government sending police and army to shut down protests and strikes at the beginning of the 19th century and killing of many of them. What was McCarthy era for?
Do you think Civil Rights would come if there was no mass protests at the time? Government purpose is to keep order and stability and it was doing it trough progressive taxation and welfare programs.
Ever since 1972 the government kept on testing the limits of civil order and stability by progressively reducing progressiveness of taxation and equality of wealth distribution. It seems OWS will put stop to that. I hope.

Sebastian: If you can't get industrial policy through the legislature when people are looking, the fact that you can sneak it in the tax code is a BAD THING, not a good thing.

Seb, I think "sneak" is misguided. Maybe you're thinking of the tax code as something different from tax legislation, but I don't see how that makes tax laws different from most laws. A shady Congress can "sneak" provisions crafted to benefit the special interests of its campaign donors into any kind of legislation, and the agency responsible for implementing the legislation then has to write the code or the regulations to match. The IRS doesn't get to "sneak" social engineering into the tax code; Congress is perfectly capable of "sneaking" social engineering into any area of the law.

A perfectly good reason to implement social or industrial policy through the tax code is that it's often convenient to implement even the most openly-arrived-at policies that way. If (if!) you think encouraging home ownership is good policy, it's more convenient for the citizenry as well as the bureaucracy to put a mortgage interest deduction into the tax forms people have to fill out anyway, rather than set up a whole separate system of forms to apply for explicit subsidies. You can think it's NOT good policy, of course, in which case I suppose you might prefer to make the implementation of it less convenient.

But I don't think it's fair to say that policies big enough to count as social engineering "sneak into" tax law any more than any other kind of law. I could be wrong, of course.

If you want flat tax then give me more equal wealth distribution, just like in most of the Europe. They can have flatter tax only because they have flatter income distribution. It is about the civil order and stability.

I'm afraid not. That is, sure, part of the goal is to prevent that, but the idea is to both prevent and deter.

The whole issue is to prevent American citizens overseas from escaping U.S. taxes. The U.S. is the only country in the world, apparently, that maintains the right to tax citizens living outside the country. Attempts to evade this, and future taxes, by renouncing citizenship, is something the U.S. has taken strong steps to try to prevent.

Among many other harsh measures, was the Reed Amendment, barring entry to the U.S. to any individual whose motivation for expatriation was tax avoidance. Who determines this motivation? The IRS. Oddly, they tend to decide that anyone with any significant amount of money is renouncing citizenship to avoid taxes, and your application to renounce your citizenship is denied.

Then in 2008 -- I'm not going through the earlier history, but I recommend my previous links -- Congress also passed an exit tax on anyone trying to renounce citizenship.

[...] Congress predicted that the exit tax would raise $249 million from 2008 to 2013, and $162 million from 2013 to 2018 [...] The provisions of the tax apply to those deemed "covered expatriates", defined as someone who meets any one of the following three tests:

Income Tax Test

The expatriate's average annual U.S. income tax liability over the 5 years prior to expatriation was over $145,000 (for renunciations as of 2010; the figure will be adjusted annually for subsequent years).

Net Worth Test

The expatriate's net worth is at least $2 million.

Compliance Test

The expatriate does not certify that he met all U.S. tax obligations for the five years before expatriation.

Then there's:

[...] Mark-to-market tax: an exit tax on the “deemed sale” of all your assets

It's true that if you have assets under $2 million, you probably don't have much to worry about, but as we keep hearing, that's not wealthy. ;-)

Meanwhile, the IRS is increasing the squeeze on citizens living overseas, which also does increase motivation to renounce, which is a major reason the numbers of people doing it have been going up, along with some obviously doing it for various other reasons.

Meanwhile, you can't, say, lose citizenship simply by fighting against the U.S., or advocating such. The law doesn't allow that. Not unless you're convicted in a court of law.

Which is why al-Awlaki wasn't stripped of citizenship. He couldn't be, without a trial.

Which is why the Administration never claimed he wasn't a citizen. Lots of People On The Internet mouthed off about this, but the law is the law.

Which is how I started looking into all this.

Though none of these links are those I looked into the other month; that's long enough ago that I don't recall what I was reading, save that it was none of the links above.

bobbyp, on that criteria, any and every change to the law, of any kind, constitutes social engineering. Which may be true in some senses, but makes the term a bit useless for discussion of any particular change. ;-)

Yes. It is commonly observed that the words "social engineering" are usually brought out as a club to end discussion rather than engage in one....as if the laws, etc., supported by those who spit those two words out with a sneer do not, in fact, "socially engineer" anything.

Discussions regarding local land use zoning laws is a particularly eye opening example.

I don't know where out individual notions of fairness come from; they are congenital, I've begun to think.

The discussion here makes me think that Goerge Lakoff is right, and that family models are central.

Specifically, the picture my "family trip" metaphor seems to give Sebastian and Brett is crucially different from what I had in mind.

Sebastian said:

Can the 20 year old insist that grandma live on the ground floor if she wants to move stuff in and out of the house every year?

He seems to be assuming (or visualizing):

that the conflict or balancing act is mostly between Strong Son and Grandma, the other family members are not involved; I was assuming that the parents were actually making many (or most) of the decisions

that the stuff is on the third floor because Grandma *wants* it to be; I was assuming that they were all living together in a third-floor walk-up apartment

that the frequency of such family trips is something Grandma controls, that her "wants" are the driving force; I assumed that the whole family is doing this *together*, as a collective decision

Meanwhile, Brett said:

The reason your family trip analogy doesn't work, is that Obama ain't my father, and I'm not a little kid. IOW, families are absolutely atrocious analogies to government. Citizens not being little kids, not particular reason to think the 'parents' feel any love towards them, families not being scalable, and so on.
...
And in the end, democracy, like any other system of government, is just a way of organizing oppression, and a free people will want as little of it as possible.

Brett seems to be assuming that one of the *individuals* in my "family trip" metaphor corresponds to the government, that government is one of the parties. I was assuming that *everyone* is part of a democratic government, just as everyone is part of the family.

I agree with Brett that families are not terribly scaleable; I would argue that *that's why we have governments*: because there are tasks we need to live that aren't well-coordinated by market exchanges. And because we actually do (or should) care about people we're not related to.

lightning appears to be correct, that the core issue is that Brett & Sebastian are perceiving my analogy to be about individuals, when I'm trying to talk about a *group*. As zie says:

The difference is that Libertarians simply don't comprehend human group interaction, while other types of "conservatives" divide people into "us" and "them" and try to ensure that "they" get as little of the pie as possible.

I have to agree: I've long felt that liberatarians can be defined as "people who don't believe humans are social animals": who believe that all adult cooperation is or can be rational and voluntary, or else it's oppression. Is it, as TonyP said, a congenital difference? Or is Lakoff right, and it's mostly about what kind of family you grew up in?

I wasn't being particularly coherent and I apologize for that. I think that there are lots of causes of icome inequality. Some are structural politicaly and/or economically, some have to do with the talents and skill which are rewarded financially as opposed to those that are not, some have to do with making good decsions as opposed to self destructive ones.

However we have literally thousands of years of discussion over this moral question: are people who get up every morning and go to work and the work they are capable of doing entitled in exchangefor their labor to a decent life? Or are those who are more powerful entitled to screw them over relentlessly just because they can?

I realize that "decent life" is an ambiguous term. It's also one that is relative to the times a person lives in. In modern America I thik a decent life includes health care. In the Middle Ages not so much.

Historically there winners in the competition for power and wealth have had rationalizations exploiting those who didn't compete succesffully. Or sometimes te raioalizations were just for not giving a shit about the ones who did not get to a level wher they could exert politcal or economic power over others or exert political or economic power for their own benefit

I have to go to work soon so this is short: the Peasents' War and the Great Chain of Being. The revolutions and the enlightenment. The struggles to form labor unions. Thee struggles to reform capitalism through legislation such as the child labor laws. and Social Darwinsim which was to some extent a push back against that.

Our ecoomy has fiancial rewards for very few people. Fifty percent of the employed people last year only earned about 25,000 dollars. Either oe assumes that thosse people, our fellow Americans are entitlted to well funded schools for thier kids, functional infrasstructure, health care, a roof over theirr heads and food on thier table, the ability to organize iot unions, a dignified old age ie a decent life in exchange for their labor, or one doesn't make that assumption. And if one doesn't make that assumption then the assumption ahs to be that all of those people are just losers who ought to be like the winners, so screw 'em.

Ereic Cantor planned to rtell an audience thatthe solutio to income inequality was for all college grads to be like Stene Jobs.

Seem to me tha the modeern Republican party with all the blather about liberty ( my money for me, me,

Dr. Science, we libertarians don't so much disbelieve that humans are social animals, as draw different conclusions from it. If humans were not social animals, we might need to drive people to cooperate at gun point, but since we are, we can get along voluntarily.

Indeed, 'that' is why we have governments, but 'that' scarcely implies the scale of government.

I've remarked before that 'liberals' are like the guy who proves to his satisfaction that you can hotwire a car to get a dying man to the hospital, and having satisfied himself on that account proceeds to steal a car every morning for his commute to work.

Ok, yes, sure, you've proven that government is necessary for some things. Now if we could only get you to admit that it's not necessary for most things, and even positively undesirable...

Seems to me that the common ground between conservatives, liberatarians and Republicans is a desire to roll back centuries of human moral development in order to create a society premised on the assumption that those who are not at the top of the economic heirarchy are resposible for not beig at the top due to their inate inferiority and do not need to be treated like fellow humans or fellow members of the same society.

It seems to me that the common ground between liberals, leftists, and Democrats, is the desire to flatter people who are mostly at the bottom because their behavior keeps them there, so that these numerous people will vote to put the liberals, leftists, and Democrats on the top, where liberals, leftists, and Democrats, who actually despise those at the bottom, figure THEY ought to be.

It seems to me that the common ground between liberals, leftists, and Democrats, is the desire to flatter people who are mostly at the bottom because their behavior keeps them there

I see one small flaw in your argument here.

There aren't enough actual leftists in anything like a position of influence in the US to support general statements about their positions on any topic. Let alone what 'common ground' they might have with liberals and/or Democrats.

There is no meaningful left in the US. There are people who think the status quo is great, people who think the status quo is pretty good but we should remember to throw some crumbs to the less fortunate, and people who think the status quo doesn't go nearly far enough.

People who think the status quo is FUBAR? In a position resembling 'there', in the sense you mean when you say 'keeps them there'?

Gold star if you can name one - one - and explain why that person qualifies as a 'leftist'.

Well, once we get beyond the astonishing claim that a small band of current day Wobblies trying to overthrow the capitalist system by unionizing one or two Starbucks outlets and Senator Ben Nelson share the same underlying basic principle that is, well, well neigh inevitable in an allegedly democratic system where there are lots more poor people than rich people...we get to the real nub of it:

...people who are mostly at the bottom because their behavior keeps them there..

There it is. Because if you give a conservative enough rope, they inevitably will arrive at this place, pure unalloyed, supercilious, assholism.

Because if you give a conservative enough rope, they inevitably will arrive at this place

There are times when I miss good old Brick Oven Bill, the man who demonstrated his superiority to the hoi polloi by growing his own potatoes and building a brick oven in his backyard, with his own two hands.

He even showed us the pictures.

Lentil stew recipes, too, and analyses of the calorie value of rice prepared in various ways.

Brett, you are so wound up by the imaginary liberals in your head that you simply can't see straight. I won't try and convince you of this, but really: your remarks could easily be cut from RedState, BigGovernment, Free Republic and pasted here.

'If you want flat tax then give me more equal wealth distribution, just like in most of the Europe. They can have flatter tax only because they have flatter income distribution. It is about the civil order and stability.'

Here's how the flat tax is one of the elements that will give you what you want. The flat tax will increase the tax burden on the middle class. Yes, it will. And that's a good thing. It will be progressive at the low income level and that's a good thing. The increased burden on the middle class will motivate the affected taxpayer-voters to pay attention closely to how their taxes are spent. All the tax expenditures that benefit the ultra-high income earners will be gone - that's a good thing. While this is going on, the added attention from the voters will increase the focus of the legislators so that they will take actions to eliminate the kinds of conditions that allowed Wall St and the big bankers and big corporations to bring the economy to a standstill and this will help create a marketplace with less crony capitalism and corruption.

And liberals will inevitably deny that the poor have any responsibility at all for their state, because the ultimate nightmare scenario for liberals is the poor ceasing to be poor and dependent.

I don't deny that most people who aren't severely mentally or physically ill have some agency.

I do assert that different people have, due to circumstances often beyond their control, differing degrees of agency.

Some people have almost no agency, for any number of reasons.

Some people have tremendous numbers of possibilities, lacking handicaps of physical or mental disability, handicaps of obligations or circumstances out of their control.

People vary in this. That's all. That's reality. It needs to be recognized.

...the ultimate nightmare scenario for liberals is the poor ceasing to be poor and dependent.

I have to say that I remain unthrilled with the folks who make absolute statements about "conservatives" or "Republicans," because whatever the more *ssh*lish ones say, they don't speak for All Conservatives or All Republicans any more than any particular Democrat speaks for all Democrats, any set of liberals speak for all others, etc.

That said, the above is simply assertion, mind-reading, and ludicrous absolutist.

It's beyond silly. It's, to be blunt, dumb.

Brett, if I made an assertion as to what All Libertarians think, you know very well how silly I'd be being.

Regrettably, since we let slide endless generalizations and absolute claims, as well as mindreading claims about "what conservatives think" (Laura, could you please be a bit less absolutist in your generalizations? Modifiers Are Our Friends at times), I can't single you out, Brett, for going over any kind of line, but I can say that your claim is flatly untrue, insupportable, unsupported, and, hey, I just disproved it by not "inevitably" saying any such thing.

Want to claim that You Know What I'm Really Thinking? And the same for everyone else who will point out that they think no such thing as you assert, and find the assertion, from our POV, ranging from wishful delusion, to... less desirable characterizations?

While this is going on, the added attention from the voters will increase the focus of the legislators so that they will take actions to eliminate the kinds of conditions that allowed Wall St and the big bankers and big corporations to bring the economy to a standstill and this will help create a marketplace with less crony capitalism and corruption.

Yes, it is, if the middle class voters continue sending the same jerks to Washington.

A non-paradigm-shifting change in the tax structure isn't going to magically make a complacent body-politic suddenly give up ingrained political behaviors that have been in place for generations and become persistently engaged. So, yeah, this is pure pie-in-the-sky.

The problem with family as a metaphor for a democratic government is that in a family, some people are generally acknowledged to have and deserve more authority than others, by virtue of their age and role rather than of some collective consensus. That problem could be avoided by instead using the metaphor of an idealised old-fashioned small town: decent neighbours help each other out when there's need, and certainly don't send each other the bill, or expect the old lady to reciprocate by doing some heavy lifting herself! But where it exists, that kind of decentralised social contract tends to require pretty serious sanctions for those who shirk their obligations, whether by not helping others or by not helping themselves. Right-wingers tend to object to the first type of sanctions, leftists to the second.

liberals will inevitably deny that the poor have any responsibility at all for their state

Poverty in the US is measured in different ways, for different purposes.

One measure is a measure of relative poverty, used basically for statistical purposes. This is typically what Census uses, and it's usually measured as half of median household income.

The other is intended to be more of an absolute measure, and indicates that a household doesn't have enough income to obtain essentials of life - food, shelter, etc. HHS uses this to determine if you qualify for various forms of aid.

As it turns out, the two measures track fairly closely for recent years. So, for instance, the Census threshold for a family of four in 2010 was $22,314, while the HHS guideline for 2011 for a family of four is $22,350.

By those measures, not quite a quarter of US households in 2010 were poor.

I'm quite open to the argument that lots of people make their own luck, and that lots of people are poor because they're reckless, or lack some basic life skills, or can't leave their own personal jones alone. I'm sure all of that is true.

I'm not sure what that should mean in terms of public policy, but yes, it is obvious that some people are poor because, for whatever reason, they are not very good at providing for themselves.

I'm not buying that that applies to somewhere between 1 out of 4 and 1 out of 5 households in the entire country.

In another thread, you mentioned 'heuristics'. A heuristic is basically a rule of thumb. It's a way of reasoning about a question that doesn't require you to exhaustively answer every single point of fact.

Basically heuristics are ways of seeing if some proposition passes the smell test.

The idea that 20+ percent of all households in the country are straight up financially incompetent doesn't pass the smell test.

There are a lot of poor people in this country, and they're not all poor because they can't get out of their own way.

The idea that 20+ percent of all households in the country are straight up financially incompetent doesn't pass the smell test.

I wouldn't have such a hard time believing that, if you expand your scope of search to all households, poor and less so. There's no shortage of high-income people who can't manage their money worth a damn. Or middling-high income people who are just not really diligent with their financial controls. Not sure where you'd draw the line for incompetence, though. It's a value judgement.

As a general statement, we all make poor choices from time to time, when we have choices at all. Just consider Lotto, and who is basically funding education in the states that use lottery-helps-fund-education as a way to make people feel better about engaging in innumeracy.

None of which is intended to make fun of people, just to suggest that poor choices come in both small and large dollar denominations. There's poor and competent, rich and incompetent, and every possible permutation of the two axes.

if somebody named Laura were to make such an assertion, I'd be wrong to respond to her in kind?

I just ignore her when she does that, but it is interesting that she doesn't get called out for it.

Convenience, maybe. I don't call you out for some of your more tendentious commenting, Brett, mostly because I know someone else will come along and do so in short time. I've actually moved over to mostly ignoring comments of that kind, but sometimes they get my goat. Laura doesn't hardly get my goat anymore, for some reason.

"Brett, if I made an assertion as to what All Libertarians think, you know very well how silly I'd be being."

And if somebody named Laura were to make such an assertion, I'd be wrong to respond to her in kind?

I just asked Laura if she could temper her generalizations.

I'd ask anyone and everyone to not engage in "s/he started!" justifications.

I'm sure you're also familiar with notion that two wrongs don't make a right.

As to whether you'd be "wrong" to "respond in kind," that's contingent, but I'd suggest that I sincerely doubt it advances your argument in many people's mind, or increases the respect anyone holds you in.

I'd suggest, particularly what with you believing so strongly in charity, that you try being big about such things, insofar as you can.

I don't think anyone would do themselves a favor -- hypothetically speaking -- if they made an defense of your behavior or speech, that's a classic for 7-year-olds.

Russell: The idea that 20+ percent of all households in the country are straight up financially incompetent doesn't pass the smell test.

Slarti: I wouldn't have such a hard time believing that, if you expand your scope of search to all households, poor and less so. ... There's poor and competent, rich and incompetent, and every possible permutation of the two axes.

My heuristic is the 27% crazification factor. There's financial poverty and there's intellectual poverty. Since roughly a quarter, let alone a fifth, of Americans are intellectually impoverished when it comes to voting, it seems plausible that 20% are intellectually impoverished when it comes to finance.

"Financially incompetent" and "poor" are not the same thing, as Slarti says. Not that Russell implied they are, either. The notion that they not only ARE the same thing, but that they're causally connected, is more attributable to Herman Cain -- who recently polled 27% himself.

All the tax expenditures that benefit the ultra-high income earners will be gone - that's a good thing.

On what grounds do you think this? Unless removing the discount for capital gains is involved, I see no prospect for 9-9-9 or anything like it to *not* reduce taxes at the upper end of the income distribution.

I'm not sure why you're dragging supposed liberal attitudes toward "the poor" into this discussion, because the 9-9-9 flat tax will raise taxes for more than 80% of the population.

Are these the "numerous" people you're talking about, who are mostly at the bottom because their behavior keeps them there?

I oppose a flat tax because it burdens everybody who's not rich, and the burden goes up as income goes down.

The poorest 20%, who you seem to feel are "mostly at the bottom because their behavior keeps them there", is largely made up of children, women (both mothers and elderly), and people with health problems. Some of those are mental health problems, so I guess their behavior *does* keep them there. Is that really who you're talking about?

I keep getting stunned by the theory that .people who are mostly at the bottom because their behavior keeps them there, / believing that jobs are created for talents that people poses/ pulling yourself by the bootstraps. Most of the conservatives and a lot, a lot of liberals (considering the basic theories) believe in this fairy tale.
Let's say that bottom 20% does "pull themselves by the bootstraps" and arrive into better incomes. What to do with those jobs they used to occupy? do they disappear or get filled with robots, illegal aliens, legal aliens, or even better, aliens. That would fit better for that fairy tale.
The problem is in 20% bottom jobs, not with people that occupy them. 20% bottom full time, slave wage jobs not people that occupy them, again.
Just take a look at Europe where the same, absolutely same jobs as bottom jobs in US have similar wage and benefits to next income level jobs.
It is about politically set up income distribution system. It is not, absolutely not, about talents, intellectual ability or any other imaginary division you can think of.

russell
If you are up for moderation of other factual mistakes. Tariffs and land royalties would cover about 10% wealthiest Americans, let be even more generous and say 20%. That is not much taxation comparing it to present.

Fifty percent of employed people last year earned $25K *or less*.
correct one is Fifty percent of *IRS fillings last year earned 25K or less.
Employees that earned less then $3500 and no dependents have no reason to file taxes to IRS. And i would guess there is 5-15% of population that fits that. Add to that 5% more of those that were not employed throughout the year and you can easily come to 65% of US population earned less then 25K.
Adding to that that this number comes from IRS that counts households not families, since many are moving in with their friends and families the picture gets even worse.

if somebody named Laura were to make such an assertion, I'd be wrong to respond to her in kind?

I don't find it polite to talk about someone while they were, as it were, still in the room. However, since Brett and Slarti have raised the issue, my own personal viewpoint has been that Laura is a relative newbie and as such, I personally tend to give folks some time to settle down. Checking the dashboard, it seems like the first time she posted was in March of this year. Brett, on the other hand, has been here much longer than that.

I also tend to think that if the internet has any kind of higher purpose, it is to let people blow steam off, so any kind of intervention by me would have probably been at a juncture where discussion was a bit more calm.

That's most probably more than anyone wanted to know about my inner thoughts about moderating, but since the implication seems to be that I, as a front pager, was cutting more slack to Laura specifically or anyone else generally, my own views is that newbies who may express themselves strongly but not directly at particular individuals are much less likely to get my attention than someone of long standing. At what point someone moves from a newbie to a person of long standing is a good question, and my answer for that is 'it depends'.

Basically all I did was take what she'd written, turn it around 180, and throw it into her face. This is what's known as a "rhetorical device". Perhaps I should have followed it up with ?

As for poor people largely being poor through their own choices, doesn't denying this essentially require you to reject one or both of the following propositions:

1. Choices have consequences.

2. Some people make better choices than other people.

Heck, *I'm* substantially poorer than I had to be, because of stupid choices I've made. Am I to believe that phenomenon stops somewhere not too far down the economic ladder below me? I'm reasoning, based on general principles, that stupid financial mistakes, (And stupid mistakes in general with financial consequences.) are to be found all through the financial spectrum, but 'depleted' at the top, and 'enriched' at the bottom, because such mistakes move you down the financial spectrum.

Look, I know you really, seriously, want to deny the poor have any responsibility for their situation. That doesn't make it true, or convincing THEM of it particularly helpful. After all, the first step to learning is realizing that you're making a mistake, do you really want to deny the poor the opportunity to learn?

As for poor people largely being poor through their own choices, doesn't denying this essentially require you to reject one or both of the following propositions:

1. Choices have consequences.

2. Some people make better choices than other people.

No, it doesn't, since it requires engaging in a number of logical fallacies (question begging, the post hoc fallacy, and affirming the consequent, just for starters) to get from either or both propositions to your conclusion.

And liberals will inevitably deny that the poor have any responsibility at all for their state, because the ultimate nightmare scenario for liberals is the poor ceasing to be poor and dependent.

I consider myself to be a liberal, and I can't imagine a more ideal outcome from our political and economic system than to eliminate poverty in the US. How does it benefit me for people to be poor and dependent?

First, the best predictor for being poor is being born that way. What does that tell you?

Sure, some number of people make bad choices and are, in the the greatest proximity, at least partly responsible for whatever situation they are in, living in poverty being one possible situation. The question is, under what conditions did they make those choices, and whether or not those conditions could be changed such that those choices would have been different, such that those people would not be poor.

The problem I see is that too many people advocate policies that will make the conditions worse for people who are already struggling, such that people who are struggling will likely make poor choices under stresses that force difficult decisions.

Here's the thing: are we looking to punish people for their bad decisions or are we looking to help them not to make those decisions, or not to have to make those decisions?

We can have a dog-eat-dog world where we simply decide people deserve what they get, there will be winners and losers, and the losers will lose so badly that they will suffer greatly or even die in the process. Meanwhile, it won't really be any better for the winners, perhaps even worse in absolute terms.

Why? That just sounds stupid and self-defeating to me (without even mentioning the fact that some people actually are misfortunate and struggle through no fault of their own).

And liberals will inevitably deny that the poor have any responsibility at all for their state, because the ultimate nightmare scenario for liberals is the poor ceasing to be poor and dependent.

The more I think about the level of cynicism and the dim view of humanity required to believe this, that this is a driving force behind liberalism, the more I think Brett is simply a misanthrope. I don't know if writing that violates the posting rules, but there it is.

I can't see arguing that people with money couldn't possibly deserve it and people without money are responsible for being poor.

Neither and both of these are true. It just seems a waste of time to argue either end of that spectrum.

People work hard, they make choices, they all have individual talents and starting places. Some get ahead, some don't. Some are dedicated to making as much money as possible, others are more likely to trade off some income for lifestyle considerations.

It is not true that the people that are extremely dedicated to making money don't deserve to get it, it is also not true that the people who aren't deserve to be poor.

The challenge comes in creating a safety net so individuals can strive to change their economic status with a safety net to fall into and maximize equality of opportunity rather than just try to force equality.

In that world there will still be rich and poor. The most fruitless conversation seems to be the one about making it so there are no poor people. There will be.

Someone will always have the least, we will designate them poor.

(On another note entirely, I get frustrated with the ridiculous generalized definition of poor. Thats 25k today, even though 25k in Dallas is very differentt than 25k in NYC. So are they both equally poor? Or does that number just make you poor anywhere?)

"And liberals will inevitably deny that the poor have any responsibility at all for their state, because the ultimate nightmare scenario for liberals is the poor ceasing to be poor and dependent."

Conservatives, Republicans and libertarians aren’t gunning for the poor. They are gunning for everyone except themselves with this sort of dismissiveness as the excuse.

Let’s look at an example of the sort of American who thinks of herself as middle class but isn’t and thinks of herself as a member in good standing of our society but, according to the fundamental assumptions of the triad of modern Social Darwinists, isn’t.

She graduated from high school barely because she does her duty but isn’t very smart in an academic way. She got married, had a child, got divorced, and her husband does not pay child support. The only reason she can afford to work is her parents take care of the baby during the day. Later the public schools will take care of the child while she works.

She gets up and goes to work and makes about 11 dollars and hour. She does not get health benefits from her job. Where she lives that’s a pretty good job. She hopes for better and applies at better places regularly but with unemployment at nearly ten percent the odds are not in her favor.

She pays payroll taxes and sales taxes. Her parents pay property taxes. She also pays fees which support government services such as her car tags. According to the flat taxers she should also pay an income tax which she cannot afford.

Also according to the triad of modern Social Darwisnists she is not entitled to the Schip funds which provides medical coverage for her child, the Social Security and Medicare which supports her parents and her and which is her only hope for a minimally decent life in her own old age, the Medicaid which would be her only help should she suffer an serious illness since she can’t afford insurance, or the Obama care which she will be eligible for next year. Also according to the triad of modern Social Darwinists it is unfair to them if they have to pay taxes which support a whole array of programs and services and amenities which they can fund privately but she can not. If her car breaks down she rides the bus but the fares have gone up due to budget cuts due to cuts in revenues due to the rightwing get-something-for-nothing philosophy. The city park is poorly maintained due to staff being reduced. User fees are going up for all kinds of things. Funding for the local public schools is under attack. The community college which is already staffed by ridiculously over qualified and under paid staffers is now experiencing budget cuts. The county used to employ a child support reclamation officer but that position has been eliminated. In order to collect child support she will have to get a lawyer and pay for the lawyer. She already owes the lawyer money for previous attempts to collect. All of the cuts cause unemployment and unemployment drags the whole regional economy down and yet the something-for –nothing folks, safe behind their own economic security continue to push various schemes for cutting their own taxes and rationalizing away their obligations toward their fellow citizens.

Because you see, if is her own fault she is where she is. It’s her fault for not being good at school, its her fault for having a child , it’s her fault for marrying the wrong guy and not staying married to him, its her fault for living at a time when unemployment is dragging wages and opportunities down, its her fault that she can’t buy a country club membership and goes the city park instead, its her fault that she can’t afford a new car and rides the bus when she is waiting for her brother to find the parts to fix hers. It’s her fault her job doesn’t provide insurance for her child. It’s all due to her innate inferiority and that innate inferiority is why the superior people should not be forced to provide charity (taxes) and should not be deprived of their liberty (money) by being taxed for things she needs and they don’t. After all she could be living in a box under a bridge in Costa Rica so that makes it OK to make life even harder for her and even easier for those who would win in the flat tax game.

A flat tax would devestate federal revenues even more than the tax cuts for the rich did. A flat tax would just drwoned the government in debt even faster than Norquist planned. The ripple effect would be to devastate state budgets and then to devastate ordiary Americans.

It isn't about poor people who indeed will always be with us. As will the selfish and the mean, unfortunately.

The issue is are we one nation, or are we disuntied into the haves/takers and everyone else?

Or put another way, do we as a group owe it to the other members of our group to provide the basics of a decent life for those who work, or are we all just on our own competing and if you don't get near the top of the heap then screw you, you are just a serf, who cares?

' A quantitative study of political invective. The research design should be fairly easy to set up. One category could be political office-holders, including, from both parties, all U.S. representatives and senators. Another category could be all political columnists on a defined set of major newspapers. A third could be talk show hosts and commentators from both radio and television. A fourth could be contributors to a set of major online magazines and blogs that have high political content—Slate, Salon, the Huffington Post, National Review’s Corner, and the like. The invective could be categorized. Comparisons with hateful people from the past (Hitler, McCarthy, Stalin, etc.). Accusations of lying. Accusations of stupidity. Accusations of treachery. Accusations of cruelty. Accusations of conspiracy. Ethnic slurs. Sexual slurs. Use of obscenities. There could also be a category for witty invective, but P.J. O’Rourke has the monopoly on that.'

This is lifted from someone's internet blog.

Much time is spent addressing mental capacities and motivations while dismissing the notion that most people's political and social views are mostly arrived at and held legitimately, IMHO.

Many of these views are based on how the different people view 'human nature', (heritable genetic effects), and the resulting influence on 'human behavior'.

So, IMO it makes sense to argue positions using facts when available and identifying expressed opinions as such, while foregoing conclusions about motivations and mental capacity.'

I've read the thread and really don't see anything wrong with anything that Laura has said. The "flat tax" and many other Republican legislative ideas seem designed to punish the working poor. Not only is that mean-spirited (and why not say it - it's true), but I don't see how it helps the country to have a large number of people distracted from their jobs and family responsibilities with the nightmare of wondering how they're going to meet their basic needs. IMHO. If someone can explain the social up-side of making low wage earners miserable so that very wealthy people can have an extra couple of grand in their already well endowed bank account, I'd love to know what it is.

Well no, he does not. That aside, the guy used to be funny. He no longer is. He is mean spirited, narrow minded, and hectoring. Now I am not unalterably condemning that sort of behavior (ass covering here), I'm just sayin' don't call it "witty". His current output consists mainly of overwrought invective.

She went to college, got a degree, got married, had four kids, put three of them thourgh college. The fourth child has severe developmental disabilities. Her husband worked for the state. She worked part time because someone had to be home with the disabled child when school wasn't providing daycare.

She lives in Wisconsin.

The Repuboicans of Wisonsin created a budget deficit for thier state by cuttig taxes for corporations. They the used their defict as an excuse for attacking the middle class and workig poor of their in every concievable way. Her husband, a state worker, first had his union attacked, then his pension attacked and now has lost his job altogether. He worked in one of those offices that gave out driver's licenses and his office was eliminated as part of the Republican voter suppression effort. Her daughter got a placement in a Medicaid funded group home about a year ago but lost her placement due to budget cuts. Since her parents aren't willing (unlke the Republicans of her state) to leave the daugher out on the street to die she has moved back home. That means at least one of the parents can't work. The other is out looking for a job in a market that is extremely harsh.

They have lost their health insurance although they will have a COBRA for awhile. They are using up their savings to make the mortgage o their modest home.

They no longer have disposible income to use to support local businesses. Since it is the ability to sell goods and services that creates employment, not tax cuts for the rich, and since this family like many other families affeted by Republican policies no longer has any spending money, their unemployment is dragging the local economy downward, making it even harder to find a job of any sort.

Romeny thinks they should hurry up and get foreclosed on already so that speculators can speculate with their house. Cain thinks that cure for unemplyment is to just go get a job.

One of the problems with just blaming the poor for being poor is that many of the poor are poor because of the Republican notion, which seems to shared by some libertarians anyway, that running the country to benefit the weatlhy and corportations is supposed to magically help eeryone else when ifact it does the opposite.

The initial subject of this thread was a flat tax and the pulling of one's own weight. The lady in Wiscosin has pulled her own weight all her life as has the hypothetical highschool grad in my first senario. However without a progessive income tax peole like her and people likethe high school grad, in fact darn near everybody will sink. In spite of working. In spite of doig what we all think we should do: get an edcuation,get a job, pay your way as much as you can. We will sink because you can't have a middle class or a miniamlly decent standard of livig for working people without sufficient revenues to support the government institutions and services and that can't happen without a progressive income.

And if it is invective to point out how selfish and irresposible people are for advocating policies which impoverish their neighbors, then I plead guilty. But my invective is not as harmful to anyone one as the flat tax, or the Republican tax cuts for the rich.

The attempt by Repubicans in Congress to make a boogey man out of supposed Medicaid cheaters

the faux issue of community organizers, especially nefarious ACORN activists

The faux issues of federal and state employees who make so much money and do nothing to deserve it

The faux issue of all those horrible poor people who ever should have presumed to own houses anyway and caused the foreclosure crisis

All this divide and conquer language and the the only thing Republicans ever actually do when they get in power is cut taxes for those who don't need tax cuts and use the resultiig loss of revenues as an excuse for attacking the economic well being of their fellow citizens.

Republicans, conservative and libertarians are always talking about personal resposiblity. Well my adivce to anyone who advocates for a flat tax or tax cuts for the wealthy or who votes for Republicans is "Take some responsiblity." Don't dish it out if you don't want to take it. The people whose lives are threatened by your policies and by the invective of the Republican party get to fight back. One way to fight back is to label behavior for what it really is. The best way I can think of to avoid being labeled as selfish is to stop supporting selfish policies.